PILON - Ill Health retiral query

[hibs123xx]

I have been givem Ill Health retiral & my employment was finally terminated in October 2011.

By this time my job had already been advertised & filled- in fact my job was advertised in June 2011 before I had been officially granted ill health retiral!!

In August 2011, I was advised in writing that I would be receiving 12 weeks In Lieu in respect of my notice & given a leaving date of 5th October 2011-that's when my entitlement to company sick pay ran out ( Yes we get a years entitlement but last 6 months are at 1/2 pay )

In my last pay in October , I received the 12 weeks in lieu of notice & accrued holiday pay & final salary payment. But my " In Lieu " payment was taxed, NI'd & pensioned by my employer - does anyone know if this is correct as it obviously affects the nett salary.

Being off sick I was never asked to work my notice as I couldn't obviously & does the fact they were advertising my Job some 5 months before I "left" make a difference?
Also when they advised me in writing in August of my official leaving date of 5th October 2011 my replacement had already began working for them.

I queried this with my employer & they say that in our comtracts they state "Payment In Lieu " maybe offfered & therefore this means that the payment is subject to Tax & NI - no mention of pension?

Can anyone throw any light on this.

Thanks

[postggj]

Re: PILON - Ill Health retiral query

most employers offer ill health retirement on this basis

a certain public sector employer does

34 weeks basic pay
a months pylon
holiday pay
enhanced pension on length of service etc

you do not pay tax etc on the first 34 weeks pay unless it is over £30,000
the pylon, being in lieu of notice will be taxed, along with any outstanding holiday entitlement

are you saying you only received pay in lieu

[labman]

Re: PILON - Ill Health retiral query

With regards to advertising your job 5 months before you're retirement on health grounds, presumably as you were off someone needed to do your job. Are you sure it was not offered on a short term contract with the possibility of it being extended - this often works out cheaper for employers than employing temps, and is certainly commonplace within the public sector.

I'm assuming it's public sector due to the excellent terms and conditions of employment.